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This past week, President Obama was in Pittsburgh to tout a government/industry/academia initiative for technology. CNN had this to say:

President Barack Obama — whose poll numbers have dipped in recent weeks amid a stubbornly sluggish economic recovery — touted the hard-hit manufacturing sector Friday, saying the country’s best production days may well lie ahead.

“We are inventors, we are makers, and we are doers. If we want a robust growing economy, we need a robust manufacturing sector,” Obama told a crowd at Carnegie Mellon University, the school founded by steel industrialist Andrew Carnegie nearly 100 years ago.

President Obama visited a university research center in Pittsburgh on Friday to announce a new partnership between the government, industries and leading universities to speed the movement of technological advances to commercial users. The trip was the latest of his increasingly frequent travels to battleground states to showcase administration efforts to create manufacturing jobs.

After touring the National Robotics Engineering Center at Carnegie Mellon University, a high-technology facility adjacent to a rusted factory symbolic of the area’s industrial past, Mr. Obama said federal agencies would invest more than $500 million to seed the initiative. Of that, $70 million is to go to robotics projects like one he viewed at the center: a boom-box-size robot that inspects sewer pipelines, made by a company started by a Carnegie Mellon professor.

Now, I am all for technological advances. My professional field is Software Quality Assurance and Testing and I have worked in every phase of software development projects. I remember all the “world of the future” type stories that Disney and other film makers would do, showing their visions of how robots would affect the world of the 21st century, making life so much easier for everyone from the assembly line worker to the housewife in her kitchen. Yet for all the potential this initiative may have for the long term future, it does nothing for the “stubbornly sluggish economic recovery.” The US economy needs something along the lines of $500B investment (and that is probably no where near enough) in initiatives that bring jobs now, not five or ten or twenty years from now.

We need good jobs for people so that they don’t need to juggle four jobs just to eke out a living (via the NY Times):

Some of these workers are patching together jobs out of choice. They may find full-time office work unfulfilling and are testing to see whether they can be their own boss. Certainly, the Internet has made working from home and trying out new businesses easier than ever.

But in many cases, necessity is driving the trend. “Young college graduates working multiple jobs is a natural consequence of a bad labor market and having, on average, $20,000 worth of student loans to pay off,” said Carl E. Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers.

…snip…

An entry-level salary often doesn’t go very far these days. According to a study by the Heldrich Center, the median starting salary for those who graduated from four-year degree programs in 2009 and 2010 was $27,000, down from $30,000 for those who graduated in 2006 to 2008, before the recession. (Try living on $27,000 a year — before taxes — in a city like New York, Washington or Chicago.)

Many earn even less than $27,000. Maureen McCarty, 23, who graduated from American University in 2010 with a journalism degree, makes $25,000 before taxes as managing editor of TheNewGay.net, a blog focusing on gay issues, with no benefits like health insurance or a 401(k). The salary doesn’t cover her expenses, so she often baby-sits five nights a week for six families in the Washington area.

Transamerica enlisted polling firm Harris Interactive to survey 668 people who had been fully employed but are now unemployed or underemployed, meaning they are working part-time but would like to be working full-time.

Not surprisingly, the most common source of funds were savings and unemployment benefits, with half of those surveyed reporting that they rely on each of those. About one-third also reported relying on credit cards and/or a partners’ income.

Despite an unemployment rate of 9.1 percent in May, nearly three million job openings went unfilled — up from roughly 2.1 million when the recession ended in June 2009. To be sure, that’s not nearly enough jobs for the roughly 15 million Americans who are out of work.

But many of those positions remain unfilled because employers can’t find qualified candidates to do the work. From manufacturing to health care, employers report that they can no longer rely on hiring entry level workers and training them on the job.

…snip…

Darlene Miller, CEO of Permac Industries in South Burnsville, Minn., said the days are long gone when a new hire could learn how to operate machinery on the job. Miller said she would add another half-dozen workers to her payroll of 38 workers — if she could find people skilled at operating the high-tech equipment she recently purchased to boost productivity.

…snip…

Miller is a member of President Barack Obama’s Council on Jobs and Competitiveness, which recently announced a goal of turning out an additional 10,000 American engineers annually by leaning on the private sector to boost university funding, add internships and create other incentives.

So apparently while sitting on record amounts of cash, industry is willing to invest in technology but not people. Again from the MSNBC article:

“In the ’60s and ’70s you could go from an entry level job on the loading dock to manufacturing engineer or accountant to maybe a manager in a corner office,” said Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce. “It doesn’t work that way anymore. The qualifications have gone up. The commitment between employer and employee has gone down. And (employers) don’t want to take five years to get you ready. They want you ready to start working — and learning — the day you walk in the door. “

What this article conveniently misses is that a lot of businesses, in their search for a better deal in a new location, create these types of problems for themselves. They want the state and local governments to subsidize the building of new facilities; they want the long term tax breaks and credits to “create new jobs” in the new locale but they are still not willing to bring a corresponding level of investment in the people to develop the necessary skills themselves. Friday’s Hartford Courant had the results of a poll of area businesses:

Fully 25 percent of the firms in the Hartford-Springfield region said they had been approached by other states, according to a report issued Friday by the Connecticut Business and Industry Association. More than 650 firms participated in the 2011 Hartford-Springfield Business survey.

…snip…

Forty-three percent of respondents said the region’s quality-of-life is its greatest asset; 30 percent of firms surveyed said the area’s best asset is its proximity to customers, while 17 percent cited the area’s skilled work force as its primary asset.

If management does not actually value proximity to a skilled labor force, then management should probably not whine about not being able to find workers with appropriate skills.

Now, poaching of businesses has long been a staple of life in the US. Growing up in small town Kentucky, I remember when the factories first came to town from the upper parts of the Midwest. I also recall how easily a factory could shut down and move on if a union were brought in.

I saw this story this week on the governor of the state in which I reside wooing of the Chicago Mercantile Exchange. Of course, if the CME were to move from Chicago to Florida, it would not help the overall economy of the US as it would destroy a corresponding job in Illinois for every job it created in Florida. And how soon would it take for the CME folks to start whining about not being able to find qualified workers in Florida.

It just seems that too many corporate executives look only at the next quarterly profit statement rather than at a long term sustainable future, for their companies and for their workers.

38 Responses to Sluggish Economy Stubbornly Resists Lack of Effort to Stimulate It

The jobs situation is just deplorable, the worst thing about it is that it is a completely contrived and unnecessary situation.

The Rethugs and the Demoncats are scaring the hell out of the populace with their fear mongering deficit fetish, it is ofcourse complete malarkey. There is never problem of funding when it’s time to go kill poor people on the other side of the planet, or to give tax breaks to rich folks, but when it comes to social programs all of a sudden we are broke. Who do they think they are fooling?

the deficit is a pseudo issue, concocted solely for the purpose to allow the wealthy to continue to squeeze and contract our economy on the backs on the workers and for the benefit of wealthy Wall Street investors such as those who currently serve as our elected officials in DC.

When they are done squeezing, at least for this round, the economy will recover, likely in the 4th quarter of this year. Then Democrat and Republican rhetoric from both sides for 2012 will be how they “saved” the economy.

Another, rarely reported, phenomenon is the fact that, in order to import (much cheaper) foreign tech workers on H1(b) visas, a company must demonstrate that it has attempted to fill the positions with American workers.

There are actually companies that specialize in advising firms in how to advertise and structure job openings such that no American can qualify, technically satisfying the requirements of the law. So I tend to look askance at complaints that businesses can’t find the workers to fill available positions.

Miller said she would add another half-dozen workers to her payroll of 38 workers — if she could find people skilled at operating the high-tech equipment she recently purchased to boost productivity.

I call BS on this statement. What Miller, is just going to leave her new machinery idle? What isn’t being said, Miller isn’t going to hire anyone, until the demand for her products come back. If she had enough business, she would hire people and train them. She just want someone else to pay and train her workers.

They are *fooling* many many citizens who either choose to identify with their oppressors (i.e., Tea Partiers, so-called libertarians & dittoheads) or those who simply aren’t really paying attention to what’s going on (which includes Obamabots, imo). Sadly, their fear-mongering is working… and citizens are all getting quite ready to give up their hard-earned Soc Sec & Medicare in the name of “we simply cannot afford this anymore but excuse me whilst I waste trillions bombing the crap outta brown people somewhere else.”

CA is really in need of lots of infrastructure improvements, which would create jobs. Not enough for everyone who needs one and not jobs that everyone could do. But it would be a start. I drove around a lot of the SF Bay Area & over to Sacramento this weekend. Nearly every single road is in *horrid* shape.

Oh yeah: we have trillion$$ upon trillion$$$ to bomb the crap outta other countries, who haven’t attacked us, but tough going if you chump serfs in the USA – who are *funding* the super rich – actually, you know, want to see a real return on your taxes… and see your neighbors, relatives & friends, you know, actually get a job these days.

Congress established MEP in 1988 to help small- and mid-sized manufacturers increase growth, cut costs, and create innovative new products and services. NIST, the federal partner in MEP, works with local and regional manufacturing experts across the United States to build a nationwide network of resources for America’s manufacturers. Several dozen NIST staff leverage over 1,400 technical experts across the nation in every state, focused on solving manufacturers’ biggest challenges and identifying opportunities for growth.

This “manufacturing initiative” has been used in interesting ways.

On December 27, 2002, the Polish government made what the media called the “deal of the century” when it announced it would buy 48 F-16 aircraft from Lockheed for $3.5 billion, rejecting offers from two other competing companies. The decision was an impressive victory for Lockheed, the U.S. government, and for Poland, which will now be able to participate as a strong and equal partner in NATO.

But the deal includes much more than the plane. Folded into the package are $6 billion in so-called offset credits, investments that Lockheed and its contractors will make in the Polish economy to offset the cost of the aircraft purchase. The goal is to develop capabilities and technology in Poland that might otherwise be difficult to obtain, thereby boosting the economy. And at a value of $6 billion, the offsets are a return of almost twice the purchase price for the aircraft.

Here U.S. Ambassador Victor Ashe explains it:
“American investors are taking advantage of Poland’s skilled labor and European Union market access. Claiming 17% of Poland’s foreign direct investment, U.S. enterprise is a potent force in a range of product and service sectors.

Here’s a bit of good news from NY brought by the Working Families Party, and funded after two years work. It looks like no help will come from the Federal govt., so states will have to work on plans. Perhaps even public banks.

The new San Francisco Oakland Bay Bridge, at $7.2 billion dollars, could create some jobs, if so much of it wasn’t being fabricated in China with Chinese steel and Chinese (low cost) labor. And the State of California sings its own praise for saving over $400 million dollars by going with the bid that exports and out-sources all this steel fabrication work. Besides, says a project engineer, the good old USofA no longer has a company that can undertake this type of work. No more made in the USA Golden Gate or George Washington Bridges. So how much can infrastructure “stimulus” benefit American workers when even state governments export public dollars to oversees companies and manufacturers? Read the grim details from today’s NY Time:

“At a sprawling manufacturing complex here, hundreds of Chinese laborers are now completing work on the San Francisco-Oakland Bay Bridge. The assembly work in California, and the pouring of the concrete road surface, will be done by Americans. But construction of the bridge decks and the materials that went into them are a Made in China affair. California officials say the state saved hundreds of millions of dollars by turning to China.
They note that with the full financial force of the Chinese government behind its infrastructure companies, the monumental scale of the work, and the prices bid, are hard for private industry elsewhere to beat.

At $7.2 billion, it will be one of the most expensive structures ever built. But California officials estimate that they will save at least $400 million by having so much of the work done in China. California decided not to apply for federal funding for the project because the “Buy America” provisos would probably have required purchasing more expensive steel and fabrication from United States manufacturers.

California officials and executives at American Bridge said Zhenhua’s advantages included its huge steel fabrication facilities, its large low-cost work force and its solid finances. “I don’t think the U.S. fabrication industry could put a project like this together,” Brian A. Petersen, project director for the American Bridge/Fluor Enterprises joint venture, said in a telephone interview.”

That “lack of qualified applicants” statement in the MSNBC report indicates that MSNBC is nothing more than a bullshit tentacle of Bill Gates. Bill Gates is the billionaire who loves to say that American engineering graduates are not qualified and are ill-prepared compared to foreign engineering graduates which is a load of bull. Bill Gates just says these things so that he can underpay a foreign engineer working in the U.S. under a visa and maximize the profits of his inefficient and crappy monopoly — Microsoft (in addition to help lead the charge for privatization of the public education system in America).

The same can be said of Darlene Miller and her fellow corporate executives who are resistant to hiring and training college graduates because they can save the costs of training new personnel by hiring laid off experienced workers for those entry level jobs (at least, the ones that did NOT get shipped overseas) and paying those experienced workers lower wages. The effect of these tactics is to lower the training and salary expenses incurred by the corporation so that the corporation can maximize its profits, the large shareholders can maximize their dividends and capital gains on stock appreciation, and executives can maximize their bonuses.

That’s the game that is presently being played in corporate America. And the result is that many college grads cannot find decent employment after graduation and have to settle for retail, waitress, and waiter jobs.

These greedy billionaires, CEOs, and investors don’t care to realize that what they are doing is unsustainable both for their own companies and for the U.S. economy in general. Take engineering for example. With entry level engineering jobs in particular going overseas, new engineering grads will have a harder, if not, impossible time gaining experience that will help them move up the engineering ladder to positions of designer and manager. There will be a deficit of research, design, and development skills in the near future. Predictably, R&D in the U.S. will suffer and will go overseas (although R&D may go overseas anyway because R&D is costly and its costs must be expensed immediately preventing greedy CEOs and CFOs from cooking the books). Without R&D, the U.S. won’t be able to compete with other countries technologically and economically. With research and development talent and investment overseas, the U.S. will not be able to underprice foreign competitors for new techonology and real goods and services meaning bankruptcy for U.S. corporations and bye-bye United States itself!

The greedy rich of this country are literally destroying the economy of the U.S. and the U.S. itself.

The great job creator.
“Of that, $70 million is to go to robotics projects like one he viewed at the center: a boom-box-size robot that inspects sewer pipelines, made by a company started by a Carnegie Mellon professor.”

If the robots that Barack seems to love so much are built and do the work of humans, would each new robot count as a new job created?

We need at least another three trillion dollars in infrastructure investments to kick start the economy. If we can confiscate all the 401 k’s and pension plans of state and federal workers we can begin to jump start the economy.

Folks, believe it or not, some things can’t be fixed with money.
As is often pointed out, business has money in the bank, loans are cheap, and Govt is spending like no tomorrow. So what’s the problem?

There are generally two attitudes in business… fear and greed, yes? Like it or not, that is what business operates on. And because business is composed of human beings, fear and greed is not always applied rationally, but money tends to focus the mind.

So business isn’t hiring. “Greedy” is the normal state of business, yes? So there must be a fair amount of fear out there inhibiting the greed, yes? You know this is true because it fits everyone’s picture of business, left or right. They are there to make money.

The next question then is… what is business afraid of? Why would business forgo efforts to make more money? Any ideas out there? If you’re interested in real jobs, business is where they come from. I’ll be interested to see who is serious and who isn’t.

Okay you’re started from the assumption that they aren’t spending out of fear rather than greed. I’ll do thye same just for the sake of theory. Perhaps they fear the same thing every other sane person is fearing…..another recession and creating products and services there is no demand for them would eventually mean their demise. No one wants to be without the proverbial chair when the music stops.

I don’t know how many times people here have to repeat that there needs to be a demand for a good or service before private enterprise creates it(they aren’t hiring people out of the goodness of their hearts but to create profit). That’s why people have argued the government should be spending to create that demand.

I’m fairly sure that isn’t the answer you wanted but there you have it, MY opinion on why they aren’t spending and instead are choosing to sit on revenue.

OK, good start.
I agree that demand isn’t growing enough. Why isn’t demand growing? What is holding people back?
Govt can throw money at the problem, and hope something happens… But so far nothing. We are currently at Bush tax rates, so that’s not the problem.
My suggestion is that fear of the future is holding people back. When times are tough people don’t take risks, they hoard. They don’t buy, they save. So, the question remains, what are they scared of?

Let’s see. Wages are STAGNANT for a large portion of the population(that’s despite profitability). Wealth for those that aren’t trust fund babies has depreciated(since houses have taken a big hit.) Commodities such as food and fuel have increased in price. Health care and education costs have increased. Safety net programs such as food stamps have already been cut and it is increasingly looking like the government will tell people that THEY will be responsible for their own retirement(after taking their money for years under the guise that it would be there for them in their old age.)

They’re afraid of the same thing business is afraid of, being stuck without a chair when the music stops.

If your wages stay the same but you have to pay more for necessities than of course, you aren’t going to run out and spend on luxuries. If you are worried that when you are old that you might be forced to eat catfood then you might very well be “saving” instead of spending. None of this takes rocket science.

Instead of helping “austerity” is generating more fear. Couple that with the decreased demand and it’s a recipe for disaster.

The problem is that “tax cuts” aren’t as effective as government spending. If you give a person a tax cut they have a choice. They can spend that money(which helps the economy) or save the money(which does nothing other than helps the already bailed out banks who have window of zero with the Fed anyway). Furthermore, the higher brackets already had the means to spend so more often than not that money gets parked in a bank. The CBO already rated the stimulus and it bears this out. That’s why government spending on infrastructure projects is a better bet. Tax holidays (like the social security holiday)only go so far for the majority when basically all of the money is eaten up by increases in commodity costs.

Boilers? Do you have any idea how many industries need boilers? Have you seen the NLRB ruling requiring Boeing to abandon an already built factory and the employees they’ve already signed up? Is it any wonder that hiring isn’t increasing.

It’s a bald faced lie. It’s a transparent, cynical, patronizing lie, and I don’t expect the Govt to do anything for us, it’s all for them. Any business investing in new hiring has got a Govt guarantee. Any one else hiring is skirting negligence. Fear of the Feds is now the primary reason to fear the future. Until that changes, it will be more of the same.

Since you’re the one who seems to think that the majority pay no taxes then why in the world would higher taxes be a major issue?

Furthermore, Boeing already has a factory. It’s motivator is greed and it’s said as much when it admitted it’s opened the factory because of it’s fear of a strike. Regulation, like taxes, are a necessary evil. I certainly don’t hear conservatives whining we need less regulation for social programs. Why in the world wouldn’t we have them for business too? Both collect money from the general public and both should be monitored and regulated for the benefit of the public.

The only thing we agree on in your larger points is war. If X amount of federal dollars is spent on war then that is money that can’t be spent on infrastructure here. Although I suspect that one of the reasons the government has been peachy keen on war is that it is probably the only federal spending the conservatives seem to allow for and ending it might be pulling the final leg off the stool.

Why woudn’t they leave for a better opportunity? Business has made it very clear that employees are disposable. Individuals are just using the business model and looking out for their own self interest. Particularly since business has made it pretty clear that being a loyal and hard worker counts for nothing. Welcome to the future where nothing is more important than your own bottom line(business and individual alike).

The business community is reaping what they have sown. You pink slip and outsource, you run to Uncle Sam whining that you can’t pay out on promises(It’s funny how regulation is hunky dory when it comes to business using it to get out of their own contractual obligations ain’t it?) and you expect people to be LOYAL to you? Not likely.

I’ve been hired to build seminars/webinars to sell Solar and a range of Energy efficiency products and services for a local company in my area. I sold them on the idea that we need to get out here and promote the folks with $$ if we want them to buy our products and to that end I’m working on a presentation and bookings with a team. This is the kind of ground work we need right now if were going to go green and create more Green work , jobs, products etc.

Alot of the folks with money have already gone green(and gotten it subsidized by the rest of us in the form of tax breaks). It’s those of us that can’t afford the upfront costs of solar panels or more energy efficient cars that are the “problem.” Even W’s Crawford ranch and Walmart have energy efficiency features. The problem is the up front cost for the 80% of us that aren’t rich.

As we cataloged, higher taxes is only one aspect of Govt threat. It is all the threats put together that inhibit business. They have no idea where the next one is coming from.
Now, you can be on the side of the EPA, NLRB, and tax collectors if you like, but then to be surprised business isn’t growing, is willfully being obtuse.

Higher taxes are only a “threat” if you’re in the top 10%(You know the people who own 70.9 percent of the wealth in this country). Frankly, I have little sorrow for them since I believe that if you clearly have benefitted from living here then you should be paying your fair share to maintain it.

They can consider it their patriotic duty the same way they foisted the war on the rest of us.

Being willfully obtuse is supporting contractual obligations for the “little folk(like homeowners)” but believing a company should have the right to jettison them when it becomes conveniently profitable for them(as is the case with Boeing.)

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